12/12/2017

The Role of Bitcoin in South Korea

South Korea has built a reputation for themselves as a proudly technologically advanced culture, and are ahead of the curve in that regard. The lull of a tech haven continues to attract visitors from all over the world, and South Korea remains an example of how to successfully integrate technological advances into their culture. One such embraced advancement is cryptocurrency, specifically Bitcoin.

South Korea is the third leading trader in the Bitcoin market, behind the United States and Japan, and began to accept cryptocurrency more widely recently. A piece by the Technology Review notes the increase in cryptocurrency usage this year. The article notes that South Korea is also the largest exchange market for Ether (another form of cryptocurrency), "accounting for more than 33 percent of its market share", as well as the belief that South Korea has a total of around one million active, daily traders, or about one out of every 50 citizens.

The popularity of cryptocurrency trading in South Korea, while it remains a delight and huge source of revenue for many people in South Korea, it has begun to worry the government. The government has begun to attempt to regulate the flow of cryptocurrency, following a ban put into place by China on ICOs (Initial Coin Offerings, a form of fundraising a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether) several weeks prior. Unlike China, South Korea has not yet put these regulations into place, and does not force companies to return ICO funds. South Korea's head of its Financial Supervisory Service, stated that "... the agency is monitoring cryptocurrency trading inside the country but has no immediate plan to directly supervise exchanges."

However, a change in that policy may be coming. Cointelegraph published a piece about a scam that rocked the South Korean cryptocurrency market this week. As per JoongAng, South Korea's biggest mainstream media outlet, reported about a "Bitcoin Platinum" that was created by a South Korean teenager as a scam. The Twitter handle @bitcoinplatinum provides limited information on how the "new" format bypasses the normal Bitcoin Blockchain, and has the trading community outraged. The reasoning behind the scam "... evidently was to try to decrease the price of Bitcoin by introducing a hard fork and profit off the short-term price trend of Bitcoin by shorting it."

In response to this, the South Korean government is, understandably, beginning to plan a response. An article in CryptoCoinsNews covers a new potential response by the government: a total ban on Bitcoin trading. A quote from Choi Jin-seok, a prosecutor at the South Korean Justice Ministry who specializes in cryptocurrency-related crimes, was published saying, "We do not rule out an option that bans trading of [all] cryptocurrencies. We acknowledge many problems stemming from the trade and are studying how to control them." The new ruling would be similar in severity to China's recent bans, essentially shutting down the cryptocurrency trade in South Korea.

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The Role of Bitcoin in South Korea

South Korea has built a reputation for themselves as a proudly technologically advanced culture, and are ahead of the curve in that regard. The lull of a tech haven continues to attract visitors from all over the world, and South Korea remains an example of how to successfully integrate technological advances into their culture. One such embraced advancement is cryptocurrency, specifically Bitcoin.

South Korea is the third leading trader in the Bitcoin market, behind the United States and Japan, and began to accept cryptocurrency more widely recently. A piece by the Technology Review notes the increase in cryptocurrency usage this year. The article notes that South Korea is also the largest exchange market for Ether (another form of cryptocurrency), "accounting for more than 33 percent of its market share", as well as the belief that South Korea has a total of around one million active, daily traders, or about one out of every 50 citizens.

The popularity of cryptocurrency trading in South Korea, while it remains a delight and huge source of revenue for many people in South Korea, it has begun to worry the government. The government has begun to attempt to regulate the flow of cryptocurrency, following a ban put into place by China on ICOs (Initial Coin Offerings, a form of fundraising a fundraising mechanism in which new projects sell their underlying crypto tokens in exchange for bitcoin and ether) several weeks prior. Unlike China, South Korea has not yet put these regulations into place, and does not force companies to return ICO funds. South Korea's head of its Financial Supervisory Service, stated that "... the agency is monitoring cryptocurrency trading inside the country but has no immediate plan to directly supervise exchanges."

However, a change in that policy may be coming. Cointelegraph published a piece about a scam that rocked the South Korean cryptocurrency market this week. As per JoongAng, South Korea's biggest mainstream media outlet, reported about a "Bitcoin Platinum" that was created by a South Korean teenager as a scam. The Twitter handle @bitcoinplatinum provides limited information on how the "new" format bypasses the normal Bitcoin Blockchain, and has the trading community outraged. The reasoning behind the scam "... evidently was to try to decrease the price of Bitcoin by introducing a hard fork and profit off the short-term price trend of Bitcoin by shorting it."

In response to this, the South Korean government is, understandably, beginning to plan a response. An article in CryptoCoinsNews covers a new potential response by the government: a total ban on Bitcoin trading. A quote from Choi Jin-seok, a prosecutor at the South Korean Justice Ministry who specializes in cryptocurrency-related crimes, was published saying, "We do not rule out an option that bans trading of [all] cryptocurrencies. We acknowledge many problems stemming from the trade and are studying how to control them." The new ruling would be similar in severity to China's recent bans, essentially shutting down the cryptocurrency trade in South Korea.